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Mobile phone industry veteran: ”Nokia should have made phones for all operating systems”

Jorma U. Nieminen - who's been in the business since phones weighed five kilos - says he can't understand why the telecoms giant didn't capitalise on its position at the head of the market.

Jorma U. Nieminen. Image: Yle

“Why on earth did Nokia decide only to work with one operating system?” Nieminen wonders. “They were the world’s largest manufacturer, so the natural decision would have been that of course we’ll make all the systems. The company’s organised in such a way that it would have been possible,” he adds.

After heading Nokia’s mobile phone section during the 80s, Nieminen and two colleagues decided to start their own company, Benefon, in 1988. The success and subsequent downhill chute of his own firm – ending in a foreign buy-out – follows a very similar trajectory to his former employer.

Floating out of control

Nieminen says his own troubles began with Benefon’s stock market flotation. “It was a mistake, because it diverted our – and especially the management’s –  attention onto things that didn’t have much to do with the business,” he admits.

Licence fees for the major GSM patents brought another blow, imposing prohibitive costs on smaller companies. “The EU made a mistake in approving those fees,” Nieminen says, “as it shut off small corporations from the successes of the GSM market. Among other costs, we had to pay 5 to 8 per cent royalties on all GSM phones that we manufactured.”

Buy-out blues

After entering bankruptcy protection in 2004, Benefon managed to secure tens of millions of euros’ worth of foreign investment. The handset business was eventually acquired by GeoSolutions in 2007, who changed its name to GeoSentric. Attempts to corner the GPS-devices market brought meagre results, and the company was de-listed from the Helsinki Stock Exchange two weeks ago.

However tracking devices continue to be manufactured in Salo, after the founders of Twig Com brought GeoSentric into their production lines in 2011.

Small is beautiful

Nieminen says he looks back fondly on Benefon’s achievements, including of the development of the Exion model, the world’s smallest, which Nieminen says came far too late to the market. The company's second world record came in the late 1990s when they produced a GSM phone complete with map software and GPS. “It was the first of its kind in the world, that we knew of,” Nieminen says.

Born in 1942, Nieminen says his entrepreneurial years are behind him, though he says he continues to hold all the shares in Benefon and therefore GeoSentric. But Nieminen says he’s not quite ready for retirement yet, and is currently putting the final touches to his PhD thesis at Turku School of Economics.

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